Your Almost Daily Bit of Wall Street Wit & Wisdom

Federal Reserve

Marriner S. Eccles Building, h/t federalreserve.gov

“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II. We are seeing a severe decline in economic activity and in employment, and already the job gains of the past decade have been erased. Since the pandemic arrived in force just two months ago, more than 20 million people have lost their jobs. A Fed survey being released tomorrow reflects findings similar to many others: Among people who were working in February, almost 40 percent of those in households making less than $40,000 a year had lost a job in March. This reversal of economic fortune has caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future.”
— Fed Chair Jerome H. Powell, Speech on Current Economic Issues

May Day or Mayday?

S&P 500 chart

Chart by Steven Sarnoff, h/t stockcharts.com

Stocks rebounded throughout the month of April.  The month ended with the market reaching a natural technical retracement level.  May Day not only started the new month, but May may see selling pick up to drive price lower over the weeks ahead.

Former support (demand) often represents new resistance (supply).  You can see on my weekly chart of the S&P 500 ETF (SPY), that price backed down after encountering the negative influence of a line of average price movement.

The character of the behavior of market price movement shows sellers regaining the edge.

Don’t be surprised to see the March lows taken out.

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Stay safe.

Best regards,

Steve

 

Resistance

bear catching salmon

Thomas Mangelsen’s iconic photo h/t mangelsen.com

SUBSCRIBER NOTE: Options Hotline monthly broadcast goes out after the close today

Former support (demand) often represents new resistance (supply).  April’s rebound brought the stock market right to technical resistance. 

A turn lower here indicates a change in the short-term balance of power.

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Best regards,

Steve